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Micron is tech's new margin king as memory crisis pushes company past Nvidia and Meta
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As Micron customers try and adjust to a new reality of constantly rising memory prices, investors in the company are enjoying historic profit margins.
Key facts
- Revenue of $41.46 billion in the fiscal third quarter was up more than $20 billion from the prior period, which had been the company's highest in its 48-year history
- As of Wednesday's close, Micron's stock is up over 700% in the past year, pushing its market cap well past $1 trillion
- Alongside its better-than-expected earnings report on Wednesday, Micron disclosed a gross margin, or the profit left after accounting for the cost of goods sold, of 84.9%, up from 74.9% in the prior
- But Nvidia's gross margin peaked at around 79% in early 2024, about six percentage points below Micron's current level
Summary
Alongside its better-than-expected earnings report on Wednesday, Micron disclosed a gross margin, or the profit left after accounting for the cost of goods sold, of 84.9%, up from 74.9% in the prior period and 39% a year earlier. That's the highest percentage among all major U.S. tech companies, topping social media giant Meta, which recorded a gross margin in the latest quarter of 81.9%, and AI chipmaker Nvidia at 75%. "Fiscal Q3 gross margin more than doubled from a year ago and was a new company record," CFO Mark Murphy said on the earnings call. Fresh records are coming fast and furious for Micron, as data center companies gobble up all the memory they can find to meet artificial intelligence demand.